Iran just tweaked the way it talks about the oil market

Iran gingerly offered some support for an oil production
freeze earlier this week — without actually agreeing to join
one.

Since the lifting of sanctions, Iran has taken a hard stance
against any production freeze, a position that ultimately ended
up being a major reason for Saudi Arabia bailing on the
Doha meeting back in April.

However, on Tuesday, Iran's oil minister Bijan Zanganeh seemed to
suggest that he'd support measures keeping prices around $50-$60
a barrel.

"Iran wants a stable market and therefore any measure that
helps the stabilization of the oil market is supported by
Iran," Zanganeh said after a meeting with OPEC
secretary-general Mohammed Barkindo, according
to Reuters.

This comment came one day after Saudi Arabia and Russia's
agreement at the G-20 summit in China to
cooperateon oil and to create a "working
group" to stabilize markets, and just weeks ahead of
the informal oil talks to be held in Algiers on September 26 and
27.

RBC
Capital Markets

"We believe that the sovereign producers could come to conclude
in Algiers that they have little to lose by capping output when
they are close to maxing out," argued the RBC Capital Markets
team, headed by Helima Croft, in a note to clients.

"While the Saudi-Iranian regional rivalry could still upend the
talks, we contend that these countries have the capacity to opt
for pragmatism in order to secure some financial relief."

Still, on Wednesday, the director for international affairs
at state-run National Iranian Oil Co., Mohsen Ghamsari,
said that Iran would be ready to decide on capping
production only after its output hit pre-sanctions levels, which
would amount to just over 4 million barrels a day,
according to Bloomberg. It currently produces around 3.8
million barrels a day.

And on Monday, Khalid al-Falih, Saudi Arabia's
oil minister,
dismissed the need for a production
freeze, leading analysts to
wonder whether the Saudi-Russia agreement on oil cooperation
would actually amount to anything.

Capital Economics

Some oil watchers have argued that
the recent talk might not necessarily
translate into action.

"While recent rhetoric suggests a freeze deal has a fighting
chance, on the ground realities make this outcome far from
certain, in light of worsening geopolitical tensions within OPEC,
too many members production below current and/or aspirational
capacity, and demand concerns if prices are driven too high, too
fast," argued a Macquarie Research team led by Vikas Dwivedi.

"Even if a 'freeze' truly materializes, it will provide little
fundamental impact. From a longer-term perspective, core OPEC and
non-OPEC producers are eyeing $50+ levels to enable future
growth," he added.

"Thus, instead of a meaningful rapprochement among key producers,
a 'freeze' may merely represent an opportunity to 'reload' only
to resume oil market hostilities."

Prices for Brent Crude oil, the international benchmark, are up
3.6% at $49.70 a barrel as of 12:36 p.m. ET.